The Financialization of Food Commodity Markets Christopher L. Gilbert and Simone Pfuderer 12 January 2013 Revised: 8 February 2013 Abstract This chapter quantifies the extent of financialization of food commodity markets over the period since 2000 and analyzes impacts of this process. We look specifically at food price bubbles, price volatility and price comovement. We reject the view that financialization has been responsible for high and volatile food commodity prices but also reject the view that financialization has not had any effects on these markets. Trades originated by financial actors, and specifically index investors, can move prices but tend typically to be volatility-reducing. The widely- commented increased comovement, which relates to oil prices but not to equity prices, appears more likely to have resulted from the use of food commodities as biofuels feedstocks than from financialization. This paper is forthcoming as a chapter in R. Jha, T. Gaiha and A. Deolalikar (eds.), Handbook on Food: Demand, Supply, Sustainability and Security. We are grateful to a referee for helpful comments. Address for correspondence: Department of Economics, University of Trento, via Inama 5, 38122 Trento, Italy. Emails: christopher.gilbert@unitn.it and simone.pfuderer@unitn.it